1.1 Introduction
Accounting is a process of identifying, recording, summarising and reporting economic informa-tion to decision makers in the form of financial statements. Financial statements will be useful to the following parties:
Suppliers Customers Employees Banks
Suppliers of equipments, buildings and other assets Lenders
Owners
1.1.1 Types of Accounts
There are basically three types of Accounts maintained for transactions : Real Accounts
Personal Accounts Nominal Accounts
Lesson Objectives
On completion of this lesson, you will be able to understand Principles and concepts of Accounting
Double Entry System of Accounting Financial Statements
Real Accounts
Real Accounts are Accounts relating to properties and assets, which are owned by the business concern. Real accounts include tangible and intangible accounts. For example,
Land Building Goodwill Purchases Cash Personal Accounts
Personal Accounts are Accounts which relate to persons. Personal Accounts include the follow-ing.
Suppliers Customers Lenders Nominal accounts
Nominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a business concern. For example,
Salary Account Dividend Account Sales
Accounts can be broadly classified under the following four groups. Assets
Liabilities Income Expenses
The above classification is the basis for generating various financial statements viz., Balance Sheet, Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance sheet and the Income and Expenses accounts are posted to Profit and Loss Account.
1.1.2 Golden Rules of Accounting
Real Accounts Personal Accounts Nominal Accounts Debit What Comes in The Receiver Expenses and Losses Credit What Goes out The Giver Incomes and Gains
1.1.3 Accounting Principles, Concepts and Conventions
The Accounting Principles, concepts and conventions form the basis for how business transac-tions are recorded. A number of principles, concepts and conventransac-tions are developed to ensure that accounting information is presented accurately and consistently. Some of these concepts are briefly described in the following sections.
Revenue Realisation
According to Revenue Realisation concept, revenue is considered as the income earned on the date, when it is realised. As per this concept, unearned or unrealised revenue is not taken into account. This concept is vital for determining income pertaining to an accounting period. It reduces the possibilities of inflating incomes and profits.
Matching Concept
As per this concept, Matching of the revenues earned during an accounting period with the cost associated with the respective period to ascertain the result of the business concern is carried out. This concept serves as the basis for finding accurate profit for a period which can be distributed to the owners.
Accrual
Under Accrual method of accounting, the transactions are recorded when earned or incurred rather when collected or paid i.e., transactions are recorded on the basis of income earned or expense incurred irrespective of actual receipt or payment. For example, a seller bills the buyer at the time of sale and treats the bill amount as revenue, even though the payment may be received later.
Going Concern
As per this assumption, the business will exist for a long period and transactions are recorded from this point of view.
The cash basis of accounting is a method wherein revenue is recognised when it is actually received, rather than when it is earned. Expenses are booked when they are actually paid, rather than when incurred. This method is usually not considered to be in conformity with accounting principles and is, therefore, used only in select situations such as for very small busi-nesses.
Accounting Period
The users of financial statements required periodical reports to ascertain the operational and the financial position of the business concern. Thus, it is essential to close the accounts at regular intervals. viz., 365 days or 52 weeks or 1 year is considered as the accounting period.
Accounting Entity
According to this assumption, a business is considered as a unit or entity apart from its owners, creditors and others. For example, in case of a Sole Proprietor concern, the proprietor is treated to be separate and distinct from the business, which he controls. The proprietor is treated as a creditor to the extent of his capital and all the business transactions are recorded in the books of accounts from the business stand point.
Money Measurement
In accounting, only business transactions and events of financial nature are recorded. Only trans-actions that can be expressed in terms of money are recorded.
1.1.4 Double Entry System of Book Keeping
As per Double Entry System of book-keeping, all the business transactions recorded in accounts have two aspects - Debit aspect (receiving) and Credit aspect (giving). For example, when a business acquires an asset (receiving) and pays cash (giving) for it. This accounting technique records each transaction as debit and credit, where every debit has a corresponding credit and vice versa.
Features of Double Entry System of Book Keeping
The Double entry system of book keeping comprises of the following features : Every business transaction affects two accounts
Each transaction has two aspects, i.e., debit and credit Maintains a complete record of all business transactions
Helps to check the accuracy of the accounting transactions, by preparation of trial balance Helps ascertaining profit earned or loss occured during a period, by preparation of Profit & Loss Account
Helps ascertaining financial position of the concern at the end of each period, by prepara-tion of Balance Sheet
Helps timely decision making based on sufficient information
Minimises the possibilities of fraud due to its systematic and scientific recording of business transactions
The following chart explains the way in which accounting transactions are recorded in the Double Entry system and financial statements are prepared.
Figure 1.1 Double Entry System
1.1.5 Mode of Accounting
Accounting process begins with identifying and recording the transactions in the books of accounts i.e., the first step in the Accounting Process is recording of transactions in the books of accounts. Accounting identifies only those transactions and events which involves money and is sorted based on various source documents.
The following are the most common source documents. Cash Memo Invoice or Bill Vouchers Receipt Debit Note Credit Note
Voucher
A voucher is a document in support of a business transaction, containing the details of such trans-action.
Receipt
When a trader receives cash from a customer against goods sold by him, issues a receipt con-taining the name of such customer, details of amount received with date.
Invoice or Bill
When a trader sells goods to a buyer, he prepares a sales invoice containing the details of name and address of buyer, name of goods, amount and terms of payments and so on. Similarly, when the trader purchases goods on credit receives a Invoice/bill from the supplier of such goods. Journals and Ledgers
A journal is a record in which all business transactions are entered in a chronological order. A record of a single business transaction is called a journal entry. Every journal entry is supported by a voucher, evidencing the related transaction.
Account
An account is a statement of transactions affecting any particular asset, liability, expense or income.
Ledger
A Ledger is a book which contains all the accounts whether personal, real or nominal, which are entered in journal or subsidiary books.
Chart of Accounts
A chart of accounts is a list of all accounts used by an organisation. The chart of accounts also displays the categorisation and grouping of its accounts.
Posting
Posting is the process of transferring the entries recorded in the journal or subsidiary books to the respective accounts opened in the ledger i.e., grouping of all the transactions relating to a par-ticular account to a single place.
Accounting Period
Generally, the financial statements are generated for a regular period such as a quarter or a year, for timely and accurate ascertainment of operating and financial position of the organisation. Trial Balance
credit, the total of the debit balances and credit balances should agree. A detailed trial balance has columns for
Account name Debit balance Credit balance
1.1.6 Financial Statements
Financial statements are final result of accounting work done during the accounting period. Financial statement serves a significant purpose to users of accounting information in knowing about the profitability and financial position of the organisation. Financial statements normally include
Trading
Profit and Loss Account Balance Sheet
Trading Account
Trading refers to buying and selling of goods. The trading account displays the transactions per-taining to buying and selling of goods.
The difference between the two sides of the Trading Account indicates either Gross Profit or Gross Loss. If the credit side total is in excess of the debit side total, the difference represents Gross Profit. On the other hand, if the total of the debit side is in excess of the credit side total, the difference represents Gross Loss. Such Gross Profit / Gross Loss is transferred to Profit & Loss Account. The Gross Profit is expressed as :
Gross Profit = Net Sales – Cost of Sales
Profit and Loss Account
The profit and loss account helps to ascertain the net profit earned or net loss suffered during a particular period. after considering all other incomes and expenses incurred over a period. This helps the company to monitor and control the costs incurred and improve its efficiency. In other words, the profit and loss statement shows the performance of the company in terms of profits or losses over a specified period.
The Net Profit is expressed as :
Net Profit = (Gross Profit + Other Income) – (Selling and Administrative Expenses + Depre-ciation + Interest + Taxes + Other Expenses)
A key element of the Profit and Loss Account, and one that distinguishes it from a balance sheet, is that the amounts shown on the statement represent transactions over a period of time, while the items represented on the balance sheet show information as on a specific date.
All revenue and expense accounts are closed once the profit and loss account is prepared. The Revenue and Expenses accounts will not have an opening balance for the next accounting period.
Balance Sheet
The balance sheet is a statement that summarises the assets and liabilities of a business. The excess of assets over liabilities is the net worth of a business. The balance sheet provides infor-mation that helps in assessing
A company’s Long-term financial strength
A company’s Efficient day-to-day working capital management A company’s Asset portfolio
A company’s Sustainable long-term performance
The balances of all the real, personal and nominal (capital in nature) accounts are transferred from trial balance to balance sheet and grouped under the major heads of assets and liabilities. The balance sheet is complete when the net profit/ loss is transferred from the Profit and Loss account.
1.1.7 Transactions
A transaction is a financial event that takes places in the course or furtherance of business and effects the financial position of the company. For example, when you deposit cash in the bank, your cash balance reduces and bank balance increases or when you sell goods for cash, your cash balance increases and your stock reduces.
Transactions can be classified as follows : Receipts – cash or bank
Payments – cash or bank Purchases
Sales
1.1.8 Recording Transactions
The important aspect of accounting is to record transactions promptly and correctly to ascertain the financial status of a company as on a particular date.
Generally, the business transactions may be of the folowing nature :
Purchase of goods either as raw materials for processing or as finished goods for resale Payment of expenses incurred towards business
Sale of goods or services
Receipts (in Cash or by Cheques) Payments (in Cash or Cheques)
The Accounting information is useful to various interested parties, both internal and external viz., Suppliers, who supply goods and services for cash or on credit
Customers, who buy goods or services for cash or on credit
Employees, who provide services in exchange of salaries and wages. Banks, with whom accounts are maintained
Suppliers of equipment, buildings and other assets needed to carry on the business. Lenders from whom, you borrow money to finance your business
Owners, who hold a share in the capital of your business
Points to Remember
Accounting is a comprehensive system to collect, analyse and commu-nicate financial information.
Double Entry accounting is a system of recording transactions in a way that maintains the equality of the accounting equation.
The three types of accounts maintained for transactions are real accounts, personal accounts and nominal accounts.
Entity is the organisational unit for which accounting records are main-tained.
Journal entry is a record of a single business transaction.
Voucher is a document evidencing the details of a financial transaction. Ledger is a book in which accounts are maintained.
Trial balance is a list of the balances of all the ledger accounts. Profit and loss statement shows the performance of the company in terms of profits or losses made by it over a specified period.
Balance sheet gives an overview of the financial position of a company as on a specific date.
2.1 Introduction
Tally.ERP 9 is the world's fastest and most powerful concurrent Multi-lingual business Accounting and Inventory Management software. Tally.ERP 9, designed exclusively to meet the needs of small and medium businesses, is a fully integrated, affordable and highly reliable software. Tally.ERP 9 is easy to buy, quick to install, and easy to learn and use. Tally.ERP 9 is designed to automate and integrate all your business operations, such as sales, finance, purchasing, inven-tory, and manufacturing. With Tally.ERP 9, accurate, up-todate business information is literally at your fingertips anywhere. The powerful new features and blazing speed and power of Tally.ERP 9 combined with enhanced MIS, Multi-lingual, Data Synchronization and Remote capabilities help you simplify all your business processes easily and cost-effectively.
2.1.1 Salient Features of Tally.ERP 9
A leading accounting package: The first version of Tally was released in 1988 and, through continuous development, is now recognised as one of the leading accounting packages across the world, with over a quarter million customers. Tally’s market share is more than 90%.
No accounting codes: Unlike other computerised accounting packages which require numeric codes, Tally.ERP 9 pioneered the ‘no accounting codes’ concept. Tally.ERP 9 users have the freedom to allocate meaningful names in plain English to their data items in the system.
Lesson Objectives
On completion of this lesson, you will be able to understand Salient Features of Tally.ERP 9
Key Components of Tally.ERP 9 How to start and exit Tally.ERP 9 Setting up a company in Tally.ERP 9 Working with companies in Tally.ERP 9
Complete business solution: Tally.ERP 9 provides a comprehensive solution to the accounting and inventory needs of a business. The package comprises financial account-ing, book-keeping and inventory accounting. It also has various tools to extract, interpret and present data.
Integrated/ Non-integrated accounting and inventory: With Tally.ERP 9, the user is able to choose between accounting and accounting with inventory. If accounting with inventory is opted for, the user can choose whether it should be integrated or not.
Flexible and easy to use: Tally.ERP 9 is very flexible. It mimics the human thought proc-ess, which means that Tally.ERP 9 can adapt to any business need. Tally.ERP 9 users need not change the way their business is run to adapt to the package.
Speed : Tally.ERP 9 provides the capability to generate instant and accurate reports, which assists the management to take timely and correct decisions for the overall productivity and growth of the company.
Power : Tally.ERP 9 allows the user to maintain multiple companies and with unlimited lev-els of classification & grouping capabilities. It also allows drill downfacility from report level to transaction level.
Flexibility : Tally.ERP 9 provides flexiblity to generate instant reports for any given period (month/year) or at any point of time besides providing the facility to toggle between Accounting & Inventory reports of the same company or between companies.
Concurrent multi-lingual capability : Tally.ERP 9 offers you the exclusive capability of maintaining your accounts in any Indian language, viewing them in another language and printing them in yet another Indian language.
Real time processing : Immediate posting & updation of books of accounts as soon as the transactions are entered, thereby facilitating instant statements & Reports. It also faciliaties real-time multi-user environment.
Versatility: Tally.ERP 9 is suitable for a range of organisations, from small grocery stores to large corporations with international locations and operations.
Multi-platform availability: Tally.ERP 9 is available on Windows 95, 98, ME, 2000 and NT. It runs on a single PC or on a network. On a network, it supports access via any com-bination of platforms.
Online Help : The Tally.ERP 9 Online Help (Alt+H) provides instant assistance on basic and advanced features or any other relevant topics of Tally.ERP 9.
Tally.NET : is an enabling framework which establishes a connection through which the remote user can access the Client's data without copying / transferring the data.
Remote Access : Tally.ERP 9 provides remote capabilities to access the data from any-where and anytime.
Control Centre : works as an interface between the user and Tally.ERP 9 installed at differ-ent sites and enables the user to cdiffer-entrally configure and administer Site/User belonging to an account.
Support Centre : allows a user to directly post his support queries on the functional and technical aspects of the Product.
Auditor's Edition : Tally.ERP 9 offers a special Auditors' Edition of Tally.ERP 9, which pro-vides auditing and compliance capabilities exclusively for Chartered Accountants.
2.1.2 Functional Features of Tally.ERP 9
BASIC ACCOUNTING BASIC INVENTORY
Complete book-keeping Stock categories
Books, registers and statements of accounts Stock query by stock group, or stock cate-gory
General ledgers Multiple godowns
Accounts receivable and accounts payable Stock transfers to godowns and branches Flexible voucher numbering Multiple stock valuation methods
Flexible classification of account heads Batch-wise/ Lot-wise, including expiry date handling
Panoramic view Alternate units of measure and tail units.
Drill-down display Tracking through receipt notes/ delivery
notes/ rejections inwards/ rejections out-wards
Database reporting Additional costs incurred on purchase
Voucher and cheque printing Movement/ Profitability analysis Party-wise/ Item-Party-wise/ Stock Group-wise
Columnar reports Customisable sales invoices using price
lists with multiple prices
Bank reconciliation Sales and purchase order processing
ADVANCED ACCOUNTING ADVANCED INVENTORY
Multiple companies Stock items classified as raw materials,
work-in-process, finished goods
Multi-currency Bill of Material with auto-adjustment of
stocks
Multiple financial years Job-working concepts, including sub-con-tracting
Comparison of data using multi-columnar
reporting. Additional cost of manufacturing with notional value and percentage
Memo vouchers CENVAT support
Post-dated vouchers Reorder levels
User-defined voucher types Stock ageing analysis
Sales and purchase extracts Batch related stock reports
Cash flow statement Point of Sale (POS)
2.1.3 Technology Advantages
Simple and rapid installation: Tally.ERP 9 has a simple, menu-driven installation proce-dure. The user can install the program files on any drive if the hard disk has partitions. The user can also specify the name and directory location of the program files. Tally.ERP 9 uses minimum hard disk space in the local drive. Its installation on the local disk takes just a few seconds.
Unlimited multi-user support: A multi-user version of Tally.ERP 9 can be installed on a network, having any number of computers with different operating systems such as Win 95, 98, NT, 2000, XP and Linux.
Internal backup/ restore: Tally.ERP 9 has an in-built, user-friendly ‘backup and restore’ option. It helps the user to take a backup of one or more companies or all companies, in a single directory, in the local hard disk, or in any external media.
Data reliability: Tally.ERP 9 offers reliable data. It uses a flexi-field, flexi-length, self-indexed, weighted file structure for an extremely compact and fast database. Tally.ERP 9 is robust and even if there is a power failure or the computer is incorrectly shut down, data is not lost. Tally.ERP 9 uses signalling quality data integrity checks, at regular levels, to ensure the complete reliability of data.
User-defined security levels: Tally.ERP 9 offers high levels of security. Users can define multiple levels of security according to their requirements. Every authorised user in the company can have an individual password, with rights to use specific features only. The user with the administrator level password will have full access and can set controls for other users.
Data security: Tally.ERP 9’s data integrity checks ensure that there are no external changes to the data. Tally.ERP 9 also uses a binary encoding format of storage to prevent devious grouping of information.
Tally audit: The Tally.ERP 9 audit feature provides the user with administrator rights and the capability to check the entries made by the authorised users and alter these entries, if Daily balances and transaction values/ Interest
calculations Excise/ VAT/ Central Sales Tax (CST)/ Tax Collected at Source (TCS) related Inventory transactions and reports Percentage-based reporting
Ratio analysis
Value Added Tax (VAT) Service Tax (ST)
Fringe Benefit Tax (FBT) Tax Deducted at Source (TDS) Tax Collected at Source (TCS) Excise
along with the name of the user, who has altered the entry, and the date and time of the alteration.
TallyVault: Tally.ERP 9 offers a data encryption option called TallyVault. Without the valid TallyVault password, the data cannot be accessed. Tally.ERP 9 follows the DES (Data Encryption Standard) encryption method to safeguard the data.
Removal of data into a separate company: Tally.ERP 9 allows users to maintain a com-pany for any number of financial years. Once the books of accounts have been completed for the earlier financial years, the user can split the company data into multiple companies as per financial periods required. Tally.ERP 9 also has a feature to split company data. The user can specify the date from which the company has to be split and Tally.ERP 9 will split the company to form two companies as per periods specified. Once the data has been split, the closing balance of the first period (first company) becomes the opening balance for the next period (second company).
Multi-directory for company management: The user can create multiple directories to store data. The data stored in these directories can be accessed directly in Tally.ERP 9, by specifying the path.
Import/ Export of data: Any transaction can be exported and imported to other software after suitably altering the current structures to accept the Tally.ERP 9 data structure. Data can also be imported to Tally.ERP 9 by writing a TDL program. The data which is to be exported from Tally.ERP 9 can be in XML, HTML or ASCII format.
Tally.ERP 9 Synchronization: Synchronization is the process of exchanging Tally.ERP 9 data between two or more locations. This process enables a branch office to send its data to the head office, over the Internet or a private network.
Graphical analysis of data: Tally.ERP 9 provides graphical analysis of data which helps the user to perform deeper analysis. The user can generate graphical analysis reports such as Sales register, Purchase register, Ledgers, Funds flow, Cash flow, Stock Item registers and so on. This helps the management to quickly judge performance and be better pre-pared for difficult times.
ODBC (Open Database Connectivity) compliance: It allows other programs to use data from Tally.ERP 9, directly. Thus, any program such as MS-Excel or Oracle, which is ODBC compliant, can use data from Tally.ERP 9. Data connectivity is dynamic, which means that any update in Tally.ERP 9 is reflected in real time in other ODBC compliant software. The user can also extract data from Tally.ERP 9 and design his/ her own report formats in other ODBC compliant software.
Protocol support: Tally.ERP 9 provides protocol support for HTTP, HTTPS, FTP, SMTP, ODBC and raw sockets with data interchange formats such as XML, HTML with XML islands, SOAP and related formats. Protocol refers to a mechanism by which information (data) can be put into or taken from Tally.ERP 9. Formats refer to the standard for informa-tion to be generated from Tally.ERP 9 or from other applicainforma-tions which can exchange data with Tally.ERP 9.
Direct web browser access: While working on Tally.ERP 9, the user can directly log on to the Tally website, provided he/ she has access to the Internet. The website lists details of all the facilities offered by Tally.ERP 9. The user can also download the latest release of
Tally.ERP 9 as and when it is available. The Tally website also offers Tally Chat, by which a user can communicate with a Tally representative and get required information.
Ability to preview and publish reports and documents on the Internet: Companies which want to publish reports and price lists on their website can do so directly from Tally.ERP 9.
E-mail Facility: Tally.ERP 9 facilitates the mailing of any Tally.ERP 9 report or document. Multilingual capability: Tally is the world's first accounting and inventory software with multilingual capability. Currently, Tally.ERP 9’s multilingual capability extends to 12 lan-guages which include nine Indian lanlan-guages (Hindi, Gujarati, Punjabi, Tamil, Telugu, Mar-athi, Kannada, Malayalam and Bengali), Bahasa Melayu and Bahasa Indonesia. Tally.ERP 9 enables you to enter data in one language and have it transliterated into different lan-guages. You can generate invoices, purchase orders or delivery notes in the language of your choice after entering data for the same in any of the nine specified languages. Also, the phonetic keyboard allows you to spell the term phonetically based on how it sounds and Tally.ERP 9 displays the data in the language selected after transliteration.
Point of Sale (POS) : POS is an acronym for Point of sale. Point of Sale can be a retail out-let, a check out counter ina shop, or any other location where a sales transaction takes place. It is a computorised cash register which adds up the sales totals, calcutates the bal-ance to be returned to buyer and automatically adjusts the inventory level to reflect the quantity sold. The equipment required for POS to work effectively are cash registers, card readers, bar-code scanners and so on.
2.1.4 Payroll
Tally.ERP 9 Payroll is integrated with Accounting and benefits the user by simplifying Payroll processing and accounting. Tally.ERP 9 Payroll enables users to set up and implement salary structures, ranging from simple to complex, as per the organisation’s requirements. The user can also align and automate payroll processes and directly integrate them with main stream account-ing applications. Tally.ERP 9 Payroll also supports configurable formats for payslip printaccount-ing; flexible salary/wage, attendance, leave and overtime registers; gratuity and expat reports.
2.1.5 Data Migration Capability
Tally.ERP 9 has the ideal solution for those who have their data in Tally 7.2 and now want to use Tally.ERP 9. Tally.ERP 9 provides a migration tool which helps the user to migrate the data easily to the latest version and continue with day-to-day transactions. Tally 6.3 users can also use the migration tool which will rewrite the version to Tally 7.2 and then migrate the data to Tally.ERP 9. Tally 8.1 users and Tally 9 Release 2.14 users can rewrite the version of their data to Tally.ERP 9.
2.1.6 Features pertaining to Duties and Taxes
The all-new package provides statutory reporting capability for VAT (Value Added Tax), Composite VAT, CST (Central Sales Tax), TDS (Tax Deducted at Source), ST (Service tax), TCS (Tax Collected at Source), FBT (Fringe Benefit Tax).
State-specific statutory VAT returns and Annexures Various CST related reports
Returns and challans for Service Tax
TCS enabled with e-TCS capability, with facility for printing certificates/ challans Composition Monthly VAT Return
Quarterly Return – Form II, in the case of Excise Dealer Periodic FBT Challans and Returns
2.2 Getting Functional with Tally.ERP 9
2.2.1 Tally.ERP 9 Start-up
Tally.ERP 9 can be started in any of the following ways :
Click on Start > Programs > Tally.ERP 9 > Tally.ERP 9 or double click on the Tally.ERP 9 icon on your desktop
The welcome screen Tally.ERP 9 – Power of Simplicity appears while the software loads. You will be ready to explore Tally.ERP 9, the moment the Tally.ERP 9 start up screen appears.
Figure 2.1 Tally.ERP 9 Start - up screen
2.2.2 Tally.ERP 9 Screen Components
Title bar: Displays the Tally.ERP 9 version number.
Horizontal button bar: Selection of Language key, Keyboard Language and Tally.ERP 9 Help.
Close button: Performs the standard Windows Operating Systems function (Windows 95 onwards), allowing you to minimise Tally.ERP 9 and work on other applications. To restore Tally.ERP 9, click the Tally.ERP 9 icon on the taskbar.
Gateway of Tally: Displays menus, screens, reports and accepts the choices and options which you select to view data as required.
Buttons toolbar: Displays buttons which provide quick interaction with Tally.ERP 9. Only buttons relevant to the current task are visible.
Calculator Area: Used for Calculator functions.
Info Panel: Displays Version number, License details, Configuration details.
2.2.3 Mouse/ Keyboard Conventions
While working with Tally.ERP 9, use the following conventions.
2.2.4 Switching between Screen Areas
When Tally.ERP 9 first loads, the Gateway of Tally screen displays. To toggle between this screen and the Calculator/ ODBC server area at the bottom of the screen, press Ctrl+N or Ctrl+M as indicated on the screen. A green bar highlights the active area of the screen.
2.2.5 Quitting Tally.ERP 9
You can exit the program from any Tally.ERP 9 screen, but Tally.ERP 9 requires all screens to be closed before it shuts down.
To quit working on Tally.ERP 9,
Press Esc until you see the message Quit? Yes or No ? Press Enter or Y, or click Yes to quit Tally.ERP 9.
Alternatively, to exit without confirmation, press Ctrl+Q from Gateway of Tally. You can also press Enter while the option Quit is selected from Gateway of Tally.
MOUSE/ KEYBOARD CONVENTIONS
Action Particulars
Click Press the left mouse button.
Double-click Press and release the left mouse button twice, without moving the mouse pointer off the item.
Choose Position the mouse pointer on the item and click the left mouse button.
Select Position the mouse pointer on the item and double-click the left mouse button.
Press Use the keys on the keyboard in the combination shown.
Fn Press the function key.
Fn Press ALT + function key.
2.3 Creation/ Setting up of Company in Tally.ERP 9
The first step towards understanding Tally.ERP 9 is to create a company in Tally.ERP 9. Create a company using the Company Creation screen.
2.3.1 Creation of a Company
Go to Gateway of Tally > Company Info. > Create Company The Company Creation screen displays as shown.
Figure 2.2 Company Creation screen
Each field in the Company Creation screen is explained below. To navigate between the fields, use the enter key or the tab key or arrow keys or the mouse.
Fields Description
Directory Tally.ERP 9 assumes that the company is to be created in the data path given in the Tally.INI file, which is displayed by default. This field is skipped by default. However, you can change this path, if you want to, by using the backspace key, so that Tally.ERP 9 saves the data to a different directory specified by you.
Name This specifies the name of the company as it appears in Tally.ERP 9. If you have several companies to create with similar names, you will have to distinguish between them to provide a unique name for Tally.ERP 9.
Mailing Name The company name given in the Name field automatically appears in this field. This can be changed according to your requirements. The correct name of the company for mailing purposes should be entered.
Address The address of the company (The mailing name and address details are picked from here for any report such as balance sheet and statement of accounts).
Statutory Compliance
for Select India from the list of countries.
State Select the appropriate State from the list of States. Pin Code Enter the PIN code of the specified address. Telephone No. Enter the telephone number of the company.
E- Mail E-mail address will be used to e-mail documents, reports and data from Tally.ERP 9.
Mobile No. Enter the mobile number of the company.
Currency Symbol This refers to the currency symbol Tally.ERP 9 will use for monetary values. By default, Tally.ERP 9 displays Rs.
Maintain Select the nature of the company i.e, Accounts only or Accounts with Inventory.
Financial Year From Specify the Financial Year (FY) for the company. Tally.ERP 9 considers 12 months from the date you give here as the Financial Year. For example, if you give 1st April 2009, your FY will be April to March - in this case, ending with 31st March 2010.
Books Beginning
From The date given for ‘Financial Year From’ is automatically displayed. However, we can specify the actual date on which the books of accounts start. In case our accounts are opened mid-way during the financial year specified, we can enter the required date and start the books of accounts accordingly.
TallyVault Password TallyVault is an enhanced security feature utilised to protect company data in an encrypted form by means of a Password. The TallyVault password entered ensures that the data is maintained permanently in an encrypted form without retaining information of the password used. Data is not accessible without the TallyVault password. Remember to keep this password private and known only to those who need to know. If the password is lost, your data cannot be recovered.
Use Security Control Tally.ERP 9 has a range of security controls, which can define the authority of various users to access the information and to enter/ alter/delete the vouchers.
2.3.2 Base Currency Information
Tally.ERP 9 needs to know the default currency for the company and how the amounts should be shown on the screen and in the reports.
Tally.ERP 9 will automatically adjust the spacing between the charac-ters and lines entered to ensure that the details fit the space available.
Accounts Only: Financial Accounts of the company only
Accounts-with-Inventory: Both Financial Accounts and Inventory of
the company.
Tally.ERP 9 recognises a wide range of date formats, e.g. 1-4-09, 01/ 04/09, 1 Apr 2009, and will convert what you enter, to a standard format.
BASE CURRENCY INFORMATION
Fields Description
Base currency symbol Pre-set as a default currency — Rs. (as specified earlier).
Formal name Complete name for the currency symbol.
By default, this is set to Indian Rupees. Number of decimal places By default, this is set to 2.
Is symbol suffixed to amounts? By default, this is set to No. For example, in India, we place the Rs symbol in front of amounts.
Symbol for Decimal Portion Enter the decimal portion for the cur-rency mentioned. Enter Paise.
Show amounts in millions? Tally.ERP 9 caters to currencies where the different parts of large amounts are called by special names. By default, this is set to No.
Put a space between amounts and symbol? By default, this is set to Yes. Decimal Places for Printing Amounts in
words You can specify the number of decimal places to print the amount in words. This number should be equal to or lesser than the number specified in Number of Deci-mal places field.
Let us create a company in Tally.ERP 9 taking the example of National Traders who purchases computer equipments, components and softwares and sells it to other companies and to the direct customers. Create a Company as per information provided below :
Go to the Gateway of Tally > Company Info. > Create Company Enter the following information to create a company:
Base Currency Information is set to the default values as given in the Table. However, if the Multi-currency feature of Tally.ERP 9 is activated - then Tally.ERP 9 allows the user to alter the Base Currency Information as required.
Field Data to be entered
Directory Accept what is displayed on the screen
Name National Traders
Mailing Name National Traders
Address No 24, Phase 1,
Peenya Industrial Area Bangalore
Statutory Compliance for India
State Karnataka Pin Code 560089 Telephone No 080 - 41237890 Mobile No. 9845293752 E-mail [email protected] Currency Symbol Rs.
Maintain Accounts with Inventory
Financial year from 1 April 2009
Books beginning from 1 April 2009
TallyVault Password (if any) Skip the Field – don't enter any details.
Use security control No
Formal name Indian Rupees
The completed company creation screen is displayed as shown below:
Figure 2.3 Completed Company Creation screen — National Traders Press Y or Enter to accept the screen.
The Gateway of Tally screen will appear as shown below:
Show amounts in millions? No
Is symbol suffixed to amounts? No
Figure 2.4 Gateway of Tally
2.3.3 Working with Multiple Companies
For a group of companies, you can maintain the details of each company separately. You can select the company to work with and close the company when it is not required. However, you can also open many companies at the same time and switch between companies without closing the application.
2.3.4 Exercise to Create another Company
Before looking at how to view and amend company details, let us create another company to experiment with. Name your company as Indus Enterprises, Financial Year as 1 April 2009 & Book beginning from 1 April 2009 and you may enter the company details as you like,
To create Indus Enterprises follow this procedure:
1. From the buttons bar select Alt + F3: Create Cmp or simply press Alt + F3 to bring up the Company Info. Menu.
2. Select Create Company from the menu to bring up the Company Creation screen.
3. Enter Indus Enterprises in the Name field and experiment with entering other data of your choice (for example, the address details).
The Gateway of Tally screen will now appear as shown below:
Figure 2.5 Gateway of Tally with the New Company — Indus Enterprises
Notice that Indus Enterprises is highlighted. This indicates that it is the currently selected company from the list of open companies.
You can now practice selecting, closing and altering company information.
Practice Exercise 1. Select a Company 2. Shut a Company 3. Alter a Company
While working with Tally.ERP 9, you can press Esc to exit from any screen before the changes you have made take effect.
To Select a Company
1. Go to the Gateway of Tally > Alt + F3 > Company Info. > Select Company OR Press F1. Tally.ERP 9 displays the List of Companies screen. All the companies created are displayed in an alphabetical order. Select the company name from the list given.
2. In case two or more companies are loaded (like National Traders and Indus Enterprises), click on the company which you need to work on so that the selected company will be highlighted and will appear on top of the list.
To Shut a Company
Go to the Gateway of Tally > Alt + F3 > Company Info. > Shut Company. Select the Company which you need to shut from the List of Companies. You can also use Alt + F1 to shut a Company from the Gateway of Tally screen.
To Alter Company Details
Go to the Gateway of Tally > Alt + F3 > Company Info. > Alter. Select the company which you need to alter from the List of Companies and press Enter to view the Company Alteration screen. Alter the company details as required and accept the screen.
You can also access these functions, by selecting the appropriate button from the button bar.
Points to Remember
Tally.ERP 9 pioneered the ‘no accounting codes’ concept. Tally.ERP 9 mimics the human thought process.
Tally.ERP 9 is multi-platform compatible and supports multi-user acces-sibility.
Tally.ERP 9 has multilingual capability and new features such as Payroll and Point of Sale.
Tally.ERP 9
After creating a Company with the required information, you can now enable/ modify Accounting & Inventory features and configurations.
3.1 F11:Features
The F11: Features are Company-specific and the F12: Configurations are applicable to all the companies in a data directory. The F11: Features is divided into the following major categories:
Accounting Features Inventory Features Statutory & Taxation Tally.NET Features
You can press F11 (functional key) from any screen of Tally.ERP 9 or you may also click on the F11: Features button available in the button bar, to enable the required features. The F11: Features are specific only to the company currently in use (for which the said feature is enabled), thereby allowing flexibility of independently enabling different features for each of the company. Go to Gateway of Tally > press F11: Features
Lesson Objectives
On completion of this lesson, you will be able to understand The basic functions of Tally.ERP 9
F11: Features & F12: Configurations Creating and Maintaining Chart of Accounts Entering the opening balances for Ledgers
The Company Features screen is displayed as shown.
Figure 3.1 F11: Features Menu
There are various settings available under Accounting Features, Inventory Features and Statutory & Taxation Features, which facilitates the additional information to be entered during voucher entry.
F1: Accounting Features
The Accounting Features consists of configurations/ functionalities, which generally affects Accounting transactions and reports. The Accounting features is further sub-divided into six sections, namely :
General
Oustandings Management
Cost/ Profit Centres Management Invoicing
Budgets/ Scenario Management Other Features
The Accounting Feature screen is displayed as shown.
Figure 3.2 F11: Accounting Features Screen Enable the required features
Press Enter to accept F2: Inventory Features
The Inventory features comprises of configurations/ functionalities pertaining to Inventory transac-tions and reports. The Inventory features is further sub-divided into seven sectransac-tions, namely :
General
Storage & Classification Order Processing Invoicing
Purchase Management Sales Management
Go to Gateway of Tally > F11: Features > Inventory Features or click on F2 : Inventory The Inventory Feature screen is displayed as shown.
Figure 3.3 F11: Inventory Features Screen Enable the required features
Press Enter to accept F3 : Statutory & Taxation
The Statutory & Taxation features comprises of configurations/ functionalities pertaining to statutory compliances available in Tally.ERP 9. The Statutory features are country specific and strictly depends upon the Country selected in the Company Creation screen. The following features are available, when India is selected in the Statutory Compliance for field in the Company Creation screen.
Excise
Value Added Tax Service Tax
Tax Deducted at Source Tax Collected at Source
Payroll
Go to Gateway of Tally > F11: Features > Statutory & Taxation or click on F3 : Statutory The Statutory & Taxation screen is displayed as shown.
Figure 3.4 F11: Statutory & Taxation Features Screen Enable the required features
Press Enter to accept F4: Tally.NET Features
The Tally.NET Features screen comprises of Registration and Remote Access of company data on Tally.NET. The Tally.NET features will be available only when, Use Security Control is set to Yes in Company master.
Go to Gateway of Tally > F11: Features > Tally.NET Features or click on F4 : Tally.NET
3.2 F12 : Configurations
In Tally.ERP 9, the F12: Configurations are provided for Accounting, Inventory & printing options and are user-definable as per your requirements.
The F12: Configurations are applicable to all the companies residing in that Tally.ERP 9 Data Directory. The F12: Configuration options vary depending upon the menu display. i.e., if you press F12: configure from Voucher entry screen, the respective F12: Configurations screen is displayed.
Go to Gateway of Tally > press F12: Configure The Configuration screen is displayed as shown.
Figure 3.5 F12: Configuration Menu
There are numerous settings available under various menus in the F12: Configurations screen, which may be configured for any additional information required to be entered during master cre-ations, voucher entry and printing.
3.2.1 General
You can configure Country Details, Style of Names, Dates and Numbers in the General configura-tion screen.
Figure 3.6 General Configuration screen
3.2.2 Numeric Symbols
You can configure Number Styles and Symbols used to represent Positive Numbers, Negative Numbers, Debit Amounts and Credit Amounts by using Numeric Symbols. This is displayed on the Number Styles configuration screen.
Figure 3.7 Number Styles Configuration screen
3.2.3 Accts / Inventory Info.
Figure 3.8 Accts / Inventory Info. screen Master Configuration
Additional information can be configured by setting the options to Yes which will accordingly appear in the masters.
Allow ALIASES along with names: This configuration helps in identifying an account by another name.
Allow Language ALIASES along with names: This configuration helps the user to give an alias in any local language.
Accounts Masters
Allow ADVANCED entries in Masters: This configuration displays the additional fields in the Accounting Masters such as:
Group behaves like a Sub-Ledger ?
Set to Yes, the group behaves like a Control Account for the ledgers it contains, wherein only the group balance is displayed. This is useful while working on groups like the Sundry Debtors and Sundry Creditors (pre-set to Yes), where the ledger items are numerous.
Nett Debit/Credit Balances for Reporting?
Set to Yes, this configuration displays the amount as a net figure instead of separate debit and credit balances as shown in the reports.
Use ADDRESSES for Ledger Accounts: This Field can be used for giving the address and Income Tax Number of the ledger accounts.
Use CONTACT DETAILS for Ledger Accounts: This Configuration gives the user an opportunity to fill details like Contact person, Telephone, Fax, E-Mail etc.
Add NOTES for Ledger accounts: This field helps the user to add the additional notes for ledger accounts.
Inventory Masters
Allow ADVANCED entries in Masters: This Configuration will display additional field in Inventory masters.
Use PART NUMBERS for Stock Items: You can enter the Part Number of the item being created for easy identification. (In certain industries, such as automobiles, their part num-bers identifies various parts). You can alternatively use this field for the Bin Card Number, Code Number etc.
Use Description for Stock Items: You can enter the description of the Stock Item that would appear in your invoices.
Use REMARKS for Stock Items: This helps to identify the product and its applications. You can give some particulars of the Stock Item created. This will help you later when you post a query for the stock of this item, while you decide whether the item is suitable for a particular requirement or not.
Use ALTERNATE UNITS for Stock Items: This is another unit, apart from the main unit, which you can use instead of the Stock Item. This is particularly useful when you need to handle different units at different times. For example, you buy Data Cables in pieces but sell them in packets of 5 pieces each. For alternate units, you are asked to give a conver-sion factor (e.g. 5) so that a link is maintained between the two. What you give here is sim-ply a conversion factor that comes up as default during a voucher entry. You may specify a different factor during voucher entry.
Allow Std. Rates for Stock Items: Standard rates enable the valuation of an inventory at standard purchase or standard sales prices. Moreover, these prices come up by default during voucher entry (you may choose to override them if required). The standards are effective from the specified dates and they continue to be used at these rates until the next date, where the standard rate changes.
Specify Default Ledger Allocation for Invoicing: This configuration allows the user to allocate the ledgers to be used for Purchase and Sales Invoice.
Allow component list details (Bill of Materials): The Bill of Materials contains a list of items that are required to make up another item. In other words, it is a list of constituent items.
Use ADDRESSES for Godowns: This configuration enables the user to give the address for locations.
3.2.4 Voucher Entry
Both the Accounting and Inventory Vouchers can be configured from this menu for additional information.
Figure 3.9 Voucher Configuration screen Accounting Vouchers
Skip Date field in Create Mode (faster entry!): Set to Yes, the Tally.ERP 9 cursor goes directly to the Dr or Cr field depending on the voucher type. However, if set to No, the Tally.ERP 9 cursor goes to the Date field. It is advantageous to set this option to Yes for a faster entry if there are many entries to be made on the same date.
Use Single Entry mode for Pymt/ Rcpt/Contra: This configuration helps in selecting multiple debits or credits depending on the type of entry.
Use Payment/Receipt as Contra: To indicate the transfer of funds from bank to cash, bank to bank and cash to bank, Tally.ERP 9 provides a voucher type called ‘Contra’. This configuration is activated while using payment and receipt vouchers for a ‘Contra’ transac-tion.
Use Cr/Dr instead of To/By during Entry: This configuration gives the flexibility to use Cr/ Dr or To/By in Vouchers as per the requirement or the understanding of the user.
Warn on Negative Cash Balance: This option in Tally.ERP 9 displays a warning if the cash balance is NIL.
Pre-Allocate Bills for Payment/Receipt: This Configuration enables the user to select the bills first before the total amount can be updated in the amount field. This option is extremely useful while Cheque Printing.
Allow Cash Accounts In Journals: Journals are adjustment entries. However, in many cases companies require journals to account for day-to-day transactions involving cash or bank accounts.
Allow Expenses/Fixed Assets in Purchase Vouchers: This configuration helps the user to enter the details of purchase of fixed assets in the Purchase Voucher.
Allow Income Accounts in Sales Vouchers: This configuration helps the user to allocate the income accounts in the sales voucher.
Show Inventory Details: This configuration when set to Yes shows the name of the stock item, quantity, rate and value details.
Show Table of Bills Details for Selection: This configuration displays a table which lists out the references of the pending bills
Show Bill-wise Details: This configuration enables the user to view the bill-wise details in the voucher.
Expand into multiple lines: This configuration displays the due date of repayment based on the credit days given.
Show Ledger Current Balances: This configuration displays the current balance of the ledger selected while an entry is made. This is a convenient feature to use since it helps to get the information without referring to the report.
Show Balances as on Voucher Date: Set to Yes, a voucher that is viewed in the alteration mode displays the ledger balances on the voucher screen based on the voucher date. Inventory Vouchers
Use Ref. Number in Stock Journal: This configuration provides an additional field called Ref. in the Stock journal, where the user can enter the reference number.
Warn on Negative Stock Balance: This configuration warns the user in cases where the item selected reaches a negative balance in the Invoice mode.
Honor Expiry Dates usage for Batches: This configuration hides the batch details that are redundant and have expired.
Show Balances as on Voucher Date: This configuration enables the user to view the inventory balances according to the voucher date
Show Godownwise Details : This configuration enables the user to view Godown details. Show Batchwise Details : This configuration enables the user to view Batch details.
3.2.5 Invoice / Orders Entry
The Invoice entry and Order entry screens can be configured for additional information such as export details, shipping details, etc.
3.2.6 Printing
This configuration helps the user to configure the printing screens for the reports and transac-tions.
3.2.7 Data Configuration
This configuration helps the user to define location of Language Files, Tally Configuration File, Export Files, Data Files and details of the companies to be loaded on startup.
3.2.8 TDL Configuration
This screen provides details regarding TDL Configuration viz., Local TDLs, Account TDLs & Remote TDLs enabled for the product.
3.2.9 Advanced Configuration
This configuration helps the user to specify Client/Server Configuration, Connection configuration and Proxy configuration for ODBC connectivity and Synchronisation of Data.
3.2.10 Licensing
This configuration helps the user to update, surrender, reset license and also configure existing License.
3.3 Setting up Account Heads
Tally.ERP 9 allows you to create Account heads and groups as per your requirements. The flexi-bility and ease of creating user-defined Account Heads and groups (Chart of Accounts) as per nature of business or business practice makes Tally.ERP 9 suitable for businesses across indus-tries, verticals and geographies, without changing the way they do their business.
3.3.1 Chart of Accounts
Tally.ERP 9 follows the Double Entry system of Accounting. It records accounting information by debiting and crediting different Ledger Accounts using different voucher types depending upon the nature of transaction. It automatically collates the debit and credit amounts and arrives at the closing balance of each ledger / group / report.
3.3.2 Pre-defined Groups of Accounts
There are 28 predefined groups in Tally.ERP 9, which are widely used in the Chart of Accounts of many trading organizations. Out of these, 15 groups are Primary Groups and the remaining 13 are Sub-Groups.
Among the 15 predefined groups, 9 Groups are Balance Sheet items and the remaining 6 groups are Profit & Loss A/c items. However, you may also alter the nomenclature of these predefined 28 Groups
The List of Accounts screen is displayed as shown 1. Capital Account
Reserves & Surplus [Retained Earnings] 2. Current Assets
Bank Accounts Cash-in-hand Deposits (Asset)
Loans & Advances (Asset) Stock-in-hand
Sundry Debtors 3. Current Liabilities
Duties & Taxes Provisions Sundry Creditors 4. Fixed Assets 5. Investments 6. Loans (Liability)
Bank OD A/c [Bank OCC A/c] Secured Loans
Unsecured Loans 7. Suspense A/c
8. Misc. Expenses (Asset) 9. Branch/Divisions
Out of the 15 pre-defined primary groups, the following are the six pre-defined groups that appear in the Profit & Loss Account.
1. Sales Accounts 2. Purchase Accounts
3. Direct Incomes [Income (Direct)] 4. Indirect Incomes [Income (Indirect)] 5. Direct Expenses [Expenses (Direct)] 6. Indirect Expenses [Expenses (Indirect)]
3.3.3 Groups and Ledgers
Group is a collection of Ledgers of the same nature. In a business, expenditures like telephone expenses, electricity charges, conveyance etc., are commonly incurred. Ledgers based on these expenditures are created to be used while accounting vouchers are entered. To know the total of such expenses for any period (a week or a month), similar natured expense ledgers are grouped.
Ledger account heads are the actual account heads with which we identify the transactions. All voucher entries have to be passed using ledgers. To Understand the concept of Groups and Ledgers, let us create Ledgers and Groups in Indus Enterprises.
1. Proprietor's Capital Account – under Capital Account with an opening balance of Rs.25000.
2. Land & Building – under Fixed Assets with an opening balance of Rs.60000.
3. Milton & Co – under Sundry Debtors because we have sold some goods to them – with an opening balance of Rs.15000.
4. Kaltronic Ltd – under Sundry Creditors – because we have purchased some goods from them with opening balance of Rs. 85000.
5. Local Sales – under Sales Account with no opening balance.
6. Local Purchases – under Purchase Account with no opening balance.
7. State Bank of India – under Bank Accounts with an opening balance of Rs. 35000. 8. Conveyance – under Indirect Expenses with no opening balance.
9. Bank Interest – under Indirect Income with no opening balance.
Notice that we have mentioned ledger names under groups i.e., under Capital Account, under Sundry Debtor, etc. which are referred to as GROUP names.
Ledgers are created in the following manner:
Go to the Gateway of Tally > Accounts Info. > Ledgers > Create. The Ledger Creation screen appears as shown below:
The Items in square brackets are aliases for the Group Names. This is another powerful feature of Tally.ERP 9, which allows you to refer to the same item under several different names.
Make sure all the options in the F12: Configure (Master configuration) are set to No. The function of each option will be explained as and when the topic is covered.
Figure 3.10 Ledger Creation screen
Practice Exercise
Two of the nine ledger accountswill be created by us. As a practice exercise you will be creating the remaining seven ledgers.
1. Proprietor's Capital Account under Capital Account with an opening balance of Rs. 25000.
Enter Name as Proprietor's Capital Account. Select Capital Account from the List of Groups.
Figure 3.11 Ledger Creation screen — Proprietor’s Capital Account Press Y or Enter to accept the screen.
Notice that Tally.ERP 9 automatically capitalises the first letter for you.
2. Land & Building under Fixed Assets with an opening balance of Rs.60000. Enter Name as Land & Building.
Select Fixed Assets from the List of Groups.
Figure 3.12 Ledger Creation — Land & Building Press Y or Enter to accept the screen.
Tally.ERP 9 displays the total debit and credit opening balances while the ledgers are being created in the Ledger Creation screen. This is to avoid differences in the opening balance.
So far, we have used the default groups provided in Tally.ERP 9, but Tally.ERP 9 does allow us to create our own groups. To know how to do so, let us explore the options available under the creation of Groups using Tally.ERP 9's pre-defined groups.
Groups can be created in the following manner:
Go to the Gateway of Tally > Accounts Info. > Groups. The Groups menu appears as shown below:
Figure 3.13 Groups Menu
Create the following Sundry Debtors Ledger accounts :
Groups - North Delhi Debtors and Bhopal Debtors under North India Debtors. Mysore Debtors and Secundrabad Debtors under South India Debtors.
Renison & Co and Milton & Co grouped under North Delhi Debtors. Solution
The solution is to first create two sub-groups North India Debtors and South India Debtors under Sundry Debtors.
Go to the Gateway of Tally > Accounts Info. > Groups > Create. Enter Name as North India Debtors
Against the field Under select Sundry Debtors from the List of Groups The Group Creation screen appears as shown below :
You can create one group at a time by pressing Enter on Create under
Single Group menu. In case, you want to create multiple groups
simultane-ously, you can create them by pressing Enter on Create under Multiple
Figure 3.14 Group Creation — North India Debtors Press Y or Enter to accept the screen.
Similarly create the following Groups:
South India Debtors under Sundry Debtors.
Mysore Debtors and Secundrabad Debtors under South India Debtors. North Delhi Debtors and Bhopal Debtors under North India Debtors.
Tally.ERP 9 allows you to create any number of groups under all the default groups. We have now created two sub-groups under Sundry Debtors viz. North India Debtors and South India Debtors. Additionally, we have created two sub-groups each under North India Debtors and South India Debtors as per the requirements.
Let us now create the ledgers for Renison & Co and Milton & Co under North Delhi Debtors. Go to the Gateway of Tally > Accounts Info. >Ledgers > Create (Multiple Ledgers).
Create Renison & Co and Milton & Co under North Delhi Debtors. Select North Delhi Debtors from List of Groups.
Enter Milton & Co in the Name of Ledger field.
Figure 3.15 Multi-Ledger Creation
North Delhi Debtors is automatically prefilled in the Under field, press Enter to accept Press Enter to accept the screen.
We have learnt to create ledgers in both the single and multiple mode under Tally.ERP 9's default pre-defined groups. We have also created our own sub-groups under Tally.ERP 9's predefined groups.
Given below is the Trial Balance of National Traders extracted from the Books of Accounts at the close of business on March 31, 2009.
The Chart of Accounts to be prepared is based on the above Trial Balance of National Traders. This is to assist you in understanding the classification of ledgers. To help you, each account has been marked as :
P - Pre-defined Tally.ERP 9 Group (no action) L - Ledger account required
NG - New Group required
NPG - New Primary Group required
Trial Balance
Particulars Debit Credit
Bank account 35000
Deposit Account 40000
Petty Cash 500
Opening Stock 286150
Sundry Debtors (Total) 57300
Compu Care Systems 5400
Data Link Technologies 26000
Spectrum Computers 12400
Supreme Computers 13500
Buildings 75000
Buildings Accum Deprn 8000
Office Equipment 25000
Office Equip Accum Deprn 4500
Tax Deducted at Source 4780
Sales tax 13600
Sundry Creditors (Total) 156000
Challenger Systems 65650
Horizon Enterprises 44750 Silverplus Computers 45600
Mutual Trust Loan 50000
Equity Capital 250000
Profit & Loss A/c 32070
3.3.4 Chart of Accounts of National Traders
1. Capital Accounts as appearing in the Balance Sheet:
Figure 3.17 Chart of Accounts in Balance Sheet — Liabilities
2. Revenue Accounts appearing in the Profit & Loss Account
Figure 3.19 Chart of Accounts in Profit & Loss account — Expenses
Tally.ERP 9 Walk-through to Create Group Names for National Traders. Check the following:
1. Check whether the Current Date is April 1, 2009. To change the Current Date, click F2: Date on the button bar. Note that Tally.ERP 9 increments the date assuming that you want to change to the next day. You can accept it or change it. Type 1-4-2009 and press Enter to accept. 2. Press Esc, if you do not have the Gateway of Tally menu displayed.
Let us now get familiar with Tally.ERP 9's Display functions.
Displaying groups in Single Group and Multiple Group in the chart of accounts
Go to the Gateway of Tally > Accounts Info. > Groups > Display (Single Group) > Select Bank Accounts.
You can now use the Page Up and Page Down keys to view different groups.
Let us now view the List of Groups in the Multiple Display Mode.
Go to the Gateway of Tally > Accounts Info. > Groups > Display (Multiple Groups) > Select All Items
The Groups in Tally.ERP 9, serve to both classify and identify account heads (ledger accounts) according to their nature. This enables a pres-entation of summarised information.
The Groups have a hierarchical organisation. At the top of the hierarchy are Primary Groups where accounts are classified into capital or revenue, more specifically into assets, liabilities, income and expenditure to determine the entire accounting and their presentation, i.e., whether a ledger affects Profit & Loss Account (as a revenue item) or goes into the Balance Sheet.
Tally.ERP 9 provides a set of reserved groups, based on mercantile accounting principles, and allows you to modify their names or create
.
Figure 3.21 Multi-Group Display screen Adding groups to the chart of accounts
Depreciation under Primary Group
Buildings and Office Equipment under Fixed Assets
Use Multiple Groups Creation to create Buildings and Office
Equip-ment.
Use Single Group Creation to create Depreciation.
In the F12: Group Configuration, Allow ADVANCED entries in Masters when set to Yes, displays Primary as an option in addition to the other pre-defined Groups.
